The world economic crisis has driven rising unemployment and the effects are being felt in New Zealand and globally. At the same time as New Zealand’s unemployment rate grows the National government has completely declined to respond to major job losses, including within heavy industry. The government’s only response on the question of unemployment has been increasing barriers to accessing benefits and vilifying unemployed people.
As the rate of unemployment grows the government’s ‘strategy’ will increasingly be shown to be nonsense and it will become more apparent to many people that only socialist solutions can resolve the unemployment problem.
The number of officially unemployed in New Zealand rose by 13,000 within the third quarter of 2012, taking the rate of unemployment to 7.3%. That is the highest rate of unemployment experienced in New Zealand since three decades ago. This increased unemployment is a result of an economic slowdown which is slowing the number of new jobs being created as well as producing redundancies.
According to the ILO the global rate of unemployment stabilised for a two year period in 2011 and 2012 but is set to increase again. In 2012 the total number of unemployed rose by 4.2 million and that number is expected to increase in 2012.
Youth unemployment rates for those aged under 25 have reached historic highs in the advanced capitalist countries of Europe in 2012. Overall, the youth unemployment rate for EU countries at September 2012 was 22.8% and was up by more than 1% on the previous year.
Rates of youth unemployment in selected European Union countries in 2012, Source: Eurostat, Bloomberg, Business Insider.
In the United States youth unemployment had stabilised in 2012 at 16%. A recent International Labour Organisation report concluded that global youth unemployment will climb to 12.9% in 2017, up 0.2% from 2012.
As with other unemployment statistics the youth statistics are based on only those actively seeking work in the labour force. However youth unemployment statistics are further tilted by the presence of youth not seeking labour participation but who are also outside of education or training, and school leavers not actively seeking training, education or employment. New Zealand’s youth unemployment rate is up. The NEET (No Employment, Education, or Training) rate was 13.4% for the September 2013 quarter. Of youth in the labour force 17.1% were unemployed. This is showing that young people are being particularly effected by the economic situation.
Socialists have always pointed out that the ruling class relies on the existence of a reserve army of labour – a pool of unemployed and under-employed workers – to put downward pressure on wages by being available to step in to jobs. This is why it is in the interest of all workers to have full employment, not to mention that any working person can be exposed to job losses. That has been seen from the redundancies at KiwiRail, Solid Energy, Tasman Pulp and Paper and Tiwai point aluminium smelter.
Capitalist governments, particularly in the most effected countries, claim they want to reduce unemployment. Their reason for this is that they want to prevent rebellions and to stabilise class relations between workers and the ruling class. However the austerity measures that are traded for debt bail-outs have the opposite effect by slowing down demand and introducing public sector cuts and spending caps.
The New Zealand government has claimed it will deal with unemployment by regenerating the economy through such ‘reforms’ as tax cuts for the rich and selling assets to pay off government debt. It also claims that the introduction of vicious probationary ‘no rights’ work trials will allow more opportunities for job seekers (but obviously not opportunities for secure jobs!). This approach is aligned with neo-liberal economic theory which holds that if there is less state intervention then markets – including the market for jobs – will correct themselves.
In terms of youth unemployment the government claims that reintroducing youth rates will create more opportunities for young job seekers. However this is contrary to the advice of the government’s own treasury, that reintroducing youth rates will not reduce youth unemployment. As with other capitalist plans to ‘help job-seekers’ this is just another way of reshuffling the deck of unemployment.
Directly or indirectly, unemployment is an issue for all ordinary and working people. Under capitalism paid work is allocated according to the needs of private profit-makers. Even public work is allocated on the basis of what the dominant capitalist class deems to be affordable. The only lasting way out of unemployment and under-employment as well as job insecurity for employed workers is through a socialist programme for a planned economy. Work would be allocated on the basis of the needs of society rather than according to the profit margins of the employers. To that end socialists are in favour of a massive expansion of employment in public works including in housing, health, childcare and education. A special focus on expansion of genuine youth programmes – rather than talkshops - is also desperately needed.